Web Alert: Mandatory Mediation Requirement Introduced in Turkey
24 January 2019
The Turkish Commercial Code has been amended to require that commercial monetary claims must be taken to a mediator before being lodged with the competent court.
The legislation, which came into force on 1 January 2019, demands that Alternative Dispute Resolution is a mandatory step to be taken between disputing parties prior to lodging a monetary claim with the Turkish courts.
Commercial claims lodged with a court prior to mediation being attempted are required by the Code to be rejected by the court. Any party failing to reasonably engage in mediation shall not be entitled to claim court fees from the opposing party regardless of the outcome of the claim.
The legal change aims to encourage alternative and cheaper dispute resolution and avoid unnecessary court costs and delays. However, there is a danger that this mandatory step will have the opposite effect for large, complex claims or those where a court judgment is required.
It remains to be seen how strictly judges will apply the provisions. Members trading to Turkey or subject to Turkish law are encouraged to bear the amendment in mind for future dispute resolutions.